Starting late last year, hundreds of US businesses began to receive demand letters from secretive patent-holding companies with six-letter gibberish names: AdzPro, GosNel, and JitNom. The letters state that using basic office equipment, like scanners that can send files to e-mail, infringes a series of patents owned by MPHJ Technologies. Unless the target companies make payments—which start at around $9,000 for the smallest targeted businesses but go up from there—they could face legal action.

Further reading

In a world of out-there patent claims, MPHJ is one of the most brazen yet. It's even being talked about in Congress. Rep. Peter DeFazio (D-OR), who has sponsored the anti-troll SHIELD Act, cited the operation as a perfect example of why the system needs reform. After publishing a story on the scanner-trolling scheme, Ars heard from letter recipients and their lawyers from around the country—Idaho and Texas, California and South Dakota.

Before the AdzPros and GosNels took over, the patents were owned by an entity called Project Paperless, which threatened dozens of businesses in Virginia and Georgia. Project Paperless ultimately filed two lawsuits, prosecuted by lawyers at Hill, Kertscher, and Wharton, an Atlanta firm with complex connections to the patents. In late 2012, Project Paperless sold the patents to MPHJ Technology Investments. Today, the anonymous owner of MPHJ operates GosNel, AdzPro, JitNom, and at least a dozen other shell companies now targeting small businesses around the country.

So how does it all work? Bringing in the patent payoffs is a lawyer-driven business. The top lawyer behind the new scanner-trolling enterprise is Brian Farney, a Texas IP lawyer who is senior partner at Farney Daniels. Farney won't reveal who he's working for; he simply refers to whoever is behind MPHJ as "the client." But the client did agree, surprisingly, to allow Farney to do an interview about the patent-enforcement campaign.

Another lawyer deeply involved in the scanner-trolling enterprise is Jay Mac Rust, a Waco, Texas attorney who works as a kind of in-house patent enforcer for MPHJ. He isn't the only one with that job, but Rust has a special role. It's up to him to calm down letter recipients who are "really irate"—and, at the end of the day, to get them to pay from $900 to $1,200 per worker. Rust didn't agree to talk to Ars, but a source has provided a recording of a revealing conversation he had with Rust.

Together, the Farney and Rust conversations show how the scanner-trolling campaign is designed. They also give a glimpse at how the lawyers involved see themselves. It's the most insight available into a scheme that, to some business owners, feels like a shakedown.

So what are the top lawyers behind MPHJ Technology Investments like? Well, on the phone they come off as really nice guys. Demanding payouts from small business users of everyday technology isn't the typical patent enforcement strategy, but it's perfectly legal under US law. As a business strategy, however, it has generally been considered unworkable—and unwise.

Well, until now. As the art of modern "patent trolling" enters its second decade, the MPHJ scanner-trolling scheme has opened a new front in the battle. The company has a patent that it believes is being violated by "99 percent" of American office workers. And it wants to get paid.

“99 percent of people are using it. You know it and I know it.”

Mac Rust is one of a few lawyers who gets certain "territories" of the MPHJ patent scheme. A person who had a conversation with Rust in January about alleged violations of the MPHJ patents—I'll call the source Mr. Smith—gave Ars a recording of his phone call. The recording was made with Rust's knowledge.

In the call, the confused Mr. Smith starts out by telling Rust he can scarcely believe what is happening. "Just to reiterate, my home printer—if I scan to e-mail, it's an option on my Hewlett-Packard printer—I do that, I owe you money?" asks Smith.

"If you said you hooked it up to the Internet, and in one button, you can scan and e-mail directly out—yes, you have violated the patent that we own," says Rust.

That means millions of Americans owe Rust’s anonymous client money. But Smith seemed overly focused on his personal behavior, with his home printer. Individuals aren’t the intended target, Rust explains.

“We’ve been trying to do what we can to focus on businesses that have 10 or more employees,” says Rust. “But look, it's not perfect. All our information is not exactly perfect. That’s why we send a letter to ask you certain questions.”

The six-letter entities are divided up by region, Rust continues. "According to patent law, if we're going to sue you, we have to sue you in your area. So we broke those up, so we could sue in those individual areas, so we don't have to drag you to Delaware [where MPHJ is incorporated]. You don't really want to fight in Delaware, and I don't want you to have to fight in Delaware."

"I see. So you're doing me a favor!" says Smith.

"In a sense, yes," replies Rust.

"So—I'm sorry," says Smith. "You're going to have to bear with me. I'm just flabbergasted."

"I highly recommend you contact a patent attorney," says Rust, a theme he returns to throughout the 15-minute phone call.

Telling target companies to consult an attorney may seem like a surprising suggestion for an enforcer of controversial patent claims. But suggesting that small companies lawyer up probably yields excellent results for Rust and MPHJ. A patent lawyer will likely tell targets that the letters shouldn’t be ignored, and the lawyer will quickly let them know the cost of fighting an issued patent, which can be hundreds of thousands of dollars—or millions, if a case actually goes to trial. That’s far more than the cash asked for by AdzPro, GosNel, and the other MPHJ entities, which will grant a license for between $900 and $1,200 per worker—around $100,000 for a 100-employee business.

"I promise, they'll help you to understand how patent law works,” says Rust. “You'll figure out it's not a scam. It's not some kind of bull. We're not trying to harass people. They'll look up the patents and tell you whether or not what you do infringes. And if you don't infringe, hey, let us know that."

In the MPHJ declaration, which Ars has obtained a copy of, a representative of the target company must swear under penalty of perjury that the company doesn't use any equipment that scans a document to e-mail and then transmits it over a network. If that statement proves to be false, the company agrees to a "consent judgment" in the amount of $1,200 per employee.

"99 percent of people are using it," says Rust. "You know it and I know it. So, yeah."

Smith continues to be incredulous that he as an individual, and not a big company, could be on the hook for payments related to patents. At one point, Rust uses an analogy about Apple v. Samsung to explain to Smith the power that MPHJ has over him.

"Do you know that if you had bought a notebook—or whatever, the Samsung version of the iPad—you know they could have come and taken those away from you? Actually made you give them all back? Do you know that?" says Rust. "So I mean—it's interesting how patent law works. They could have actually stopped everybody from using them. Even though you paid your thousand bucks for the thing, they could have taken them away, under patent law."

Near the end of the call, Smith asks Rust how he even got his phone number. (The call was initiated when Rust called Smith; Smith had been repeatedly calling the call center number featured on the threat letters.)

Rust explains that in general, the scheme is broken up geographically, with certain MPHJ lawyers getting certain regions. The lawyers stick with the target company they are assigned to, suggesting they are paid on some kind of commission basis. But there’s a certain type of business owner that always ends up with Rust and his easygoing Texas drawl: the angry ones.

"You're the lucky guy that gets me," Rust explains to Smith. "I get to answer all the ones that are really, really… irate. And I understand that."

"I'm not irate at you, Mac, because like I said, you seem nice," says Smith. "But I am irate."

"I know you are, and I don't blame you," says Rust. He continues:

That's why I encourage people to go to a lawyer. Look, I'm a regular lawyer, too. I started out doing litigation. So if I had seen it [the threat letter], I would have gone, "Aw, bullshit," just like everybody else. But unfortunately once you get into the patent world, you'll find out… some guy that made an invention in 1999, back when this was a novel idea, really does have rights. Even going for a long time into the future. Now that… scanning and e-mailing has replaced the fax machine, all of a sudden his invention is really, really valuable.

Rust ignored our phone calls and e-mails requesting interviews over a period of several weeks. Last week, I made a final phone call to let him know we were moving to publication with a piece that included a recorded phone conversation of him as well as a photo.

He returned that call within minutes.

"I'd appreciate you not running a photo of me, anywhere," said Rust. "You know how photographs work, with copyright and all. If there's a photograph up online of me, I own it."

I simply told Rust that we did have a photo that was fine for us to use, with or without his permission. I asked if he would talk about his work on the MPHJ patent campaign at all.

"No," he said. "I think you've already talked to Brian Farney. I doubt seriously if anything I say is going to change your mind about the legality of this, or anything else."

304 Reader Comments

I've applied for the patent for replying to articles about copyright trolling and calling the lawyers assclowns. In addition, I'm also applying for the patent of applying for patents. And you can't complain about my patents, because I've patented that.

I've also patented the letter e, both verbally and written. About 99% of you are violating this patent. The rest are either under one year old, or only using 'txtspk'. Expect to hear from my lawyers Dewey, Cheetum, and Howe.

I don't understand why these companies do not get involved. The troll outfits are attacking their products, their consumer base, and their business. People won't buy your product if they think they will be liable to be sued. Their market is under attack and I have not heard a single word on them actually caring.

My thoughts exactly. If your consumer base is getting sued into oblivion for merely using a feature that you implemented and advertised, well it might be time to get involved and protect your business model (ie, ensure you have a healthy consumer base).

These stories just get more an more implausible all the time, and that has nothing to do with the writing. I'm a firm believer that people are (generally) becoming more intelligent all the time, yet instances like this just smash my hope in humanity against a wall every time I read one.

Also, seriously, $900-1200 per USER for this tech? A legitimate claim might entail an appropriate fee per device, say four to seven dollars, but the demanded amount screams, "punch Mac in the face!"

C-r-a-p like this just needs the most powerful yet most under-utilised weapon available to the masses.....civil disobedience. Everyone filed with these patent suits, every single one should just ignore it. Its not like they can sue an entire country full of people.

Anyway I'm off to scan something and send it.....they can't touch me where I live

i'm sure in the 8 other pages of comments someone mentioned this but i think this guy needs a better understanding of networks vs the internet as a whole. at one point in the article he says 'if you have a scanner hooked up to the internet with a single button to scan to email, you're violating.' but another point he said 'scans documents directly to email'. those are two different things.

a scanner can be connected to a server within the companies own network that will email the document to the person who scanned it. no connection to external networks is required for this to work.

a scanner that is 'hooked up to the internet' would imply that the scanner has to contact a 3rd party like HP or Xerox in the process of sending the scan via email. That is a service offered by some printer manufactures so that's possible.

i just looked at the first patent listed in the letter of the original article and it covers both options i listed above... only makes sense that it was approved right? that patent was filed in 2008, granted in 2011..... definitely makes sense it was approved............a decade or more after people had been using the system..

I don't understand why these companies do not get involved. The troll outfits are attacking their products, their consumer base, and their business. People won't buy your product if they think they will be liable to be sued. Their market is under attack and I have not heard a single word on them actually caring.[/quote]

The manufacturers are getting involved(Canon & Ricoh that I know of). Canon is having some customers send their notices to their Legal counsel in NY.

IANAL but this definitely rubs me the wrong way. I don't see how an end user should be legally responsible for violating a patent when simply enabling an intended functionality of the device as was sold. Either the patent should should apply to the device that was sold and therefor the MFG should have dealt with properly licensing the patent or the patent should be invalid. Imagine having to get a license for MP3 decoding to legally use your MP3 player or a license from the MPEG-LLA to play a video in your DVD player. You are plugging your MFC device into your network and maybe configuring a mail server and suddenly you are infringing on a patent? The device should be properly licensed to perform all its intended functionality. Obviously, with everything being computerized now a days you could theoretically infringe on a lot of patents if you do some crazy modification, like allowing people to play tetris on the copier lcd while waiting for their job to finish, but anything that is a MFG provided functionality should be licensed.

To me the biggest tell tail sign is their target. Small companies. Likely to be infringing and easy enough to scare into sending some money to avoid a scary lawsuit. There are plenty of other targets that could generate a lot more money for them but they are also a lot more likely to be able to defend themselves and end up cost the lawyers money instead of making them money.

I'm not at all surprised that he encourages them to consult a lawyer because that probably works out really well for him. Legally speaking, your best option really is to settle. Fighting it would be significantly more expensive and would probably bankrupt a lot of these firms in the process of attempting to win unless they manage to get EFF or someone to represent them. Telling the small company to ignore them is not a legally viable option for a lawyer. Sadly it probably is the best option in reality. They are probably very unlikely to actually file a lawsuit for the same reason that it is bad for the company to try to fight it. It gets expensive for them to sue you and they could end up getting nothing in the process if you go bankrupt while fighting them. You just have to make sure you don't let them get a default judgement if they do actually sue you. Up until the completely ignoring them is realistically the best option but once they do actually sue you definitely get a good lawyer.

Does the patent cover the ENTIRE process? Setting up the mail server, configuring the network, determining which ports to use, etc? All the fine details?

If not, I don't see how this can be a complete patent. My limited understanding of patents tells me that they should cover in rather rigorous detail the method being patented, otherwise it's simply too vague.

I could file a patent to use Port 1412 for outgoing mail, setting up the mail server to accept mail on that port, configure the network to carry that traffic three times around the periphery before finally arriving at the mail server, and then have the server make an annoying noise through the self-designed speaker attached to a magnet on the case.

I have made a unique process. It's stupid, but it's unique. I can patent that... I think. Tell me if I'm wrong, please.

I don't understand why these companies do not get involved. The troll outfits are attacking their products, their consumer base, and their business. People won't buy your product if they think they will be liable to be sued. Their market is under attack and I have not heard a single word on them actually caring.

The manufacturers are getting involved(Canon & Ricoh that I know of). Canon is having some customers send their notices to their Legal counsel in NY.[/quote]

Well that is good. I guess I was a little hasty charging them with not caring. I would assume this is a very big deal to them and they will want to do something about it.

It's amazing the lengths people will go to to avoid doing real work. They spend more time and money looking for a shortcut than if they actually had a real job. Then take that same wanna be con man and give him a law license and no shame, and you get this character.

I'm a little confused here... people who purchased a product with a feature they wanted are the ones violating the patent of dubious validity, not the people making the product using the patent?

How the hell is that legal? Shouldn't be the other way around? Shouldn't end users be protected against this kind of bollocks?

This is similar to the one-click-purchase patent. The patented process is what they are claiming. According to this lawyer's claim: The device simply allows it to be done. As long as the function is never used, the patent is dormant. When someone actually presses the button, then the patented process is used and the button presser has infringed on the patent.

Here, I've got an idea. Every office just sticks an extra button on their printer/scanner/copiers. When the scan/email a document they just push this extra button hence it isn't one press scanning/emailing.

At any rate, how the hell do they define one button scan/email? You obviously have to type in the email address or select it from a contact list.

Here, I've got an idea. Every office just sticks an extra button on their printer/scanner/copiers. When the scan/email a document they just push this extra button hence it isn't one press scanning/emailing.

At any rate, how the hell do they define one button scan/email? You obviously have to type in the email address or select it from a contact list.

Replace the button with a rocker switch or a dial?(Yes, I know -- but it isn't any dumber than the alleged patent.)

The specific reason I see this as complete and utter bull is that these companies that are being sued have not created technology that infringes on the patent in question. They do not provide a service that infringes on the patent. They use a product, and that product was created and sold by someone else.

Compare/contrast this to the other patent article from today, Lodsys. It would be like them suing the PLAYERS of mobile games for purchasing something from inside a game.

In this case, they are suing the people who can't really fight back because there are more of them. I'd forward these letters to Xerox, HP, etc... and say if they allow this then using their products is costing you hundreds of thousands of dollars.

Here's what I want to know. The patent talks about e-mailing a scan directly from the printer with the push of a button. What if I lock/dismantle/remove the control panel on the scanner, connect the scanner to a server with a USB cable, and software on the server attaches scanned documents to e-mail messages. Since I am no longer using the feature built into the scanner (which is now permanently disabled), am I still violating this patent? If I am, than I can just remove the scanner part and turn it into a separate machine. Or I can just use cameras and OCR software. Problem solved!

This should be fairly easy to get looked after. Just request a letter from Xerox Ect, stating that your use of there product in the intended way is not infringing of any known patents, and that they will be responsible for any patent licence fees. If they will not do this tell them you will have to go to another supplier that will. If they loose enough business they will take care of this pretty quick.

"Because of the way the patents are written, MPHJ actually can’t go after scanner manufacturers. Only the whole “system”—putting the scanner together with a network—infringes."

I'm pretty sure this is wrong; you cannot violate a patent if you (or a company for its internal use) assemble the invention. Patents are a market restriction; Apple sought to ban Samsung phones from sale - Samsung could make as many 'copies' as it likes provided it does not offer them on the market. Given this read, a copy shop which copied the 'invention' of "scanner"+"internet" would be liable when offering their scan&email product to the public, but the common, internal use of multifunction printers does not infringe.

"I'd appreciate you not running a photo of me, anywhere," said Rust. "You know how photographs work, with copyright and all. If there's a photograph up online of me, I own it."

I hope he knows patent law better than he knows copyright...

I hope so too because anybody who knows even a little about copyright already knows that the person or organization who takes the picture owns the copyright and can license it if they please until the copyright is transferred like when you go to your local photographer and get some family photos taken. They're his/hers until you pay them which is when the copyright transfer also takes place. It's not explicit, but it is implicit to the extreme.

No, in the case of your typical mall photographer you are paying for prints of the photos not any copyrights. You have no rights to reproduce the images unless you pay an extra, or included, fee for reproduction rights.You can buy the copyrights to the images but that normally is more money and a would require the contracts to state that. This is in the US, in Canada the payer has the copyright, but I thought i heard that they were revising their laws to assign the copyright to the photographer.

Eh, US copyright law is like discharge water from a factory: I'm not going swimming in it. However, since Rust likely didn't take the photo and it was a photographer for the magazine he was on, the magazine thus holds the copyrights and can license them out at will. You can say that the photographer was freelance, but the magazine has lawyers and would have a contract transferring copyright to the magazine publisher upon payment.

and it was a photographer for the magazine he was on, the magazine thus holds the copyrights and can license them out at will. You can say that the photographer was freelance, but the magazine has lawyers and would have a contract transferring copyright to the magazine publisher upon payment.

Not likely. Magazines, in general do not transfer copyrights from freelancers.

"I'd appreciate you not running a photo of me, anywhere," said Rust. "You know how photographs work, with copyright and all. If there's a photograph up online of me, I own it."

I hope he knows patent law better than he knows copyright...

I hope so too because anybody who knows even a little about copyright already knows that the person or organization who takes the picture owns the copyright and can license it if they please until the copyright is transferred like when you go to your local photographer and get some family photos taken. They're his/hers until you pay them which is when the copyright transfer also takes place. It's not explicit, but it is implicit to the extreme.

No, in the case of your typical mall photographer you are paying for prints of the photos not any copyrights. You have no rights to reproduce the images unless you pay an extra, or included, fee for reproduction rights.You can buy the copyrights to the images but that normally is more money and a would require the contracts to state that. This is in the US, in Canada the payer has the copyright, but I thought i heard that they were revising their laws to assign the copyright to the photographer.

Eh, US copyright law is like discharge water from a factory: I'm not going swimming in it. However, since Rust likely didn't take the photo and it was a photographer for the magazine he was on, the magazine thus holds the copyrights and can license them out at will. You can say that the photographer was freelance, but the magazine has lawyers and would have a contract transferring copyright to the magazine publisher upon payment.

Either way: me 0.5, Rust 0 on copyright law.

It sounds like he's *sunglasses* a little rusty. (Yeahhhh!)--Edit... puntuation.

Even better: murder. Not by me, of course, nor by any Ars member. But, you know, we're hearing about all these mass shootings anymore. Why don't these shooters take out patent trolls instead of innocent strangers in movie theaters and schools? Why can't there be a Unabomber vigilante who goes after people and corporations like this?

flyflytn wrote:

C-r-a-p like this just needs the most powerful yet most under-utilised weapon available to the masses.....civil disobedience. Everyone filed with these patent suits, every single one should just ignore it. Its not like they can sue an entire country full of people.

Anyway I'm off to scan something and send it.....they can't touch me where I live